Grants and scholarships can affect the cost of college

Financial aid, through grants and scholarships, can tremendously affect how much a student pays for college.

Recently, Grow by Degrees, a coalition of the Virginia Business Higher Education Council, commissioned a study to determine the impact of financial aid on students at Virginia’s public and private colleges.

The study, carried out by McGuireWoods Consulting in Richmond, indicated that among other things, a four-year private institution with a large endowment and a large amount of financial aid could be competitive in costs with public institutions.

A vivid example is the University of Richmond.

The University of Richmond has the highest tuition of any college, public or private, in Virginia at $40,010.

Room and board, books, and other fees bring the total cost to $50,530, making it one of the more expensive universities in America.

However, after grants and scholarships are factored in –the average net price for an incoming freshman is $17,372, a 65 percent reduction from the sticker price.

Like many colleges and universities, Richmond uses tuition income to provide financial aid, meaning that full-price students help offset the costs to other students. UR, an institution of 4,250 students, also has an endowment of nearly $1.9 billion (as of June 30, 2011).

The use of endowments and tuition income to reduce the costs at highly selective institutions such as the University of Richmond isn’t unusual.

Harvard University, for example, has a sticker price of $52,652, but the average net price for an incoming Harvard student this year will be is $18,277, according to national data. Harvard’s endowment, nearly $32 billion, is the nation’s largest.

Experts caution that comparing institutions solely on the basis of costs can be misleading.

The U.S. Department of Education suggests using the navigator feature available through its website http://nces.ed.gov/collegenavigator/ to find an institution that best suits students’ interests and their budget.